### A1 - BLAGAB I minus E computation (LAM03000)

| Step | Description | Amount | Total | |------|-------------|--------|-------| | **Step 1 – BLAGAB income** | Property business *(LAM03090)* | 47,701 | | | | Loan relationship and derivative income *(LAM03070)* | 527,136 | 574,837 | | **Step 2 – BLAGAB chargeable gains less losses** | Net chargeable gains *(LAM03200)* | (G) | 230,333 | | **Step 3 – Sundry receipts and minimum profits charge** | Sundry receipts *(LAM03100)* | 455 | | | | Minimum profits charge *(A2) (LAM03500)* | 9,500 | 9,955 | | **Step 4 – Sum of steps 1 – 3, deduct any BLAGAB non-trading deficit. Result is ‘I’** | Sum of steps 1 – 3 | 821,247 | | | | Non-trading deficit *(LAM03070)* | (2,501) | | | | ‘I’ | | 818,746 | | **Step 5 – Adjusted BLAGAB management expenses ‘E’** | Less BLAGAB management expenses *(A3) (LAM04000)* | (288,650) | | | **Step 6 – subtract ‘E’ from ‘I’** | I minus E profit / (excess BLAGAB expenses) *(A8)* | | 536,218 | | | Less non-BLAGAB allowable losses under s95 FA 2012 *(LAM03400)* | (6,122) | 530,096 |

### A2 - Minimum profits charge (LAM03510)

| Description | Amount | Total | |----------------------------------------------------------------------------|--------------|-------------| | **Adjusted I-E profit / excess BLAGAB expenses** | | | | I minus E profit | (A1) 530,096 | | | Ignore minimum profits charge | (9,500) | | | Add BLAGAB non-taxable distributions | 118,577 | | | **Adjusted BLAGAB trade profit** | (A4) 650,273 | | | Less BLAGAB trade loss b/f | (1,600) | | | **Compare the adjusted BLAGAB trade profit with adjusted I-E profit** | | | | Minimum profits charge | (A1) 9,500 | |

### A3 - BLAGAB management expenses (LAM04000)

| Description | Amount | Total | |----------------------------------------------------------------------------|--------------|-------------| | **Step 1 – Company’s ordinary BLAGAB management expenses of the AP** | | 109,620 | | Ordinary BLAGAB management expenses | | | | **Step 2** | | | | less six-sevenths of the acquisition expenses of the period | (42,500) | 67,120 | | **Step 3 – deemed BLAGAB management expenses – FA2012/S78(3)** | | 200,000 | | Spreading of acquisition expenses | 169,150 | | | Capital allowances on management assets | 22,500 | | | Transitional relief for old annuity contracts | 8,350 | | | **Step 4 – total of steps 1-3, adjust for expenses reversed in the AP and BLAGAB trade loss utilised** | | 263,520 | | Sum of steps 1 to 3 | 267,120 | | | Deduct relief previously given for expenses repaid in the AP | (3,600) | | | Adjust for BLAGAB trade loss relieved | 0 | | | **Step 5 – add management expenses brought forward to the sum of step 4** | | 288,650 | | Management expenses brought forward | 12,500 | | | Minimum profits charge of previous AP | 12,630 | | | Adjusted BLAGAB management expenses | (A1) 25,130 | |

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1 The Minimum Profits Charge is carried forward to the next accounting period as an excess management expense.

### A4 - BLAGAB trade (LAM07000)

| Accounting profit before tax | Profit before tax | Total | |------------------------------|-------------------|-------| | | | 677,211 |

| Adjustments to accounting profit | | | |----------------------------------|----------------------|-------| | Disallowed expenses | 9,430 | | | Capital allowances – management assets | (27,350) | | | Pre 2013 Deferred Acquisition Costs (DAC) | 11,620 | | | Pre 2013 Deferred income | (1,350) | | | Transitional receipt/(expense) | (19,288) | | | Policyholder tax adjustment (A7) | nil | |

| BLAGAB trade profit for tax | | | |-----------------------------|----------------------|-------| | BLAGAB trade profit | | 650,273 |

| Less BLAGAB trade loss brought forward | | | |---------------------------------------|----------------------|-------| | BLAGAB trade loss brought forward | (1,600) | |

### A5 - Non-BLAGAB trade (LAM07000)

| Accounting profit/loss before tax | | | |-----------------------------------|----------------------|-------| | Loss before tax | | (6,253) |

| Adjustments to accounting profit | | | |----------------------------------|----------------------|-------| | Disallowed expenses | 3,650 | | | Capital allowances – management assets | (2,460) | | | Pre 2013 Deferred Acquisition Costs (DAC) | 10,340 | | | Pre 2013 Deferred income | (7,630) | | | Transitional receipt/(expense) | 4,350 | |

| Non-BLAGAB loss for tax | | | |-------------------------|----------------------|-------| | Non-BLAGAB trade loss | | (5,605) |

| Non-BLAGAB trade losses | | | |-------------------------|----------------------|-------| | Less offset against other profits | (A8) | (5,605) |

| Non-BLAGAB trade losses | | | |-------------------------|----------------------|-------| | Current period loss carried forward | | Nil | | Non-BLAGAB trade loss brought forward | | (5,840) |

### A6 - Long-term business fixed capital and other non-trade (LAM11000)

| Description | Total | |----------------------------------------------------------------------------|--------| | Loan relationships and derivative income | 21,540 | | Non-trading gain on intangible assets | 7,660 | | Chargeable gains | 655 | | Capital losses not arising from BLAGAB | (655) | | Management expenses | (5,880)| | Non-trading loan relationship deficit brought forward CTA2009/S457(1) | (1,250)| | Profit / (loss) | (A8) | | **Total** | **22,070** |

**LTBFC contains structural assets and those grandfathered from pre 1 January 2013 shareholders’ funds. Tax rules applicable to investment companies apply.**

### A7 - Policyholders’ share of I minus E profit (LAM060000)

| Description | Total | |----------------------------------------------------------------------------|--------| | I minus E profit | (A1) | | Reduced by adjusted BLAGAB trade profit (below) | (530,096) | | Policyholders’ share | (A8) | | **Total** | **nil** |

**Policyholders’ share calculation**

**Adjusted amount of BLAGAB trade profit**

**Shareholders’ share of BLAGAB non-taxable distributions**

| Description | Total | |----------------------------------------------------------------------------|--------| | BLAGAB trade profit reduced by brought forward losses (A4) | 648,673| | Reduced by shareholders share of BLAGAB non-taxable distributions | (118,577)| | Adjusted BLAGAB trade profit | 530,096| | BLAGAB non-taxable distributions (A2) | 118,577| | Shareholders’ share of BLAGAB non-taxable distributions (LAM05050) | 118,577|

## A8 - Tax calculation

| | BLAGAB I - E | LTBFC | Total per return | |--------------------------------|--------------|-------|------------------| | Non-trade loan relationship income | (A1) 527,136 | (A6) 21,540 | 548,676 | | Property business | (A1) 47,701 | | 47,701 | | Sundry and minimum profits | (A1) 9,955 | | 9,955 | | Profits before gains | (A1) 584,792 | (A6) 21,540 | 606,332 | | Net chargeable gains | (G) 236,455 | 0 | 236,455 | | Non-trading gain on intangible fixed assets | (A6) 7,660 | | 7,660 | | Non trading deficit on loan relationship | (A1) (2,501) | | (2,501) | | Management expenses | (A3) (288,650) | (A6) (5,880) | (294,530) | | Non-trading loan relationship deficits brought forward CTA09/S457(1) | (A6) (1,250) | | (1,250) | | Net profits before reliefs | (A1) 530,096 | (A6) 22,070 | 552,166 | | Shareholders' profits before reliefs | 530,096 | 22,070 | 552,166 | | Less trading losses CTA10/S37 (non-BLAGAB) | (A5) (5,605) | | (5,605)² | | Group relief | (120,650) | | (120,650) |

² This example does not reflect the operation of the loss streaming rules introduced in F (No 2)A 2017 LAM08000 Full example computation LifeCo Limited

| Shareholders’ share of profits | 403,841 | 22,070 | (A9) 425,911 | |-------------------------------|---------|--------|--------------| | Policyholders’ share of profits | (A7) nil | (A9) nil | | Total taxable profits | 403,841 | 22,070 | 425,911 |

A9 - Tax liability

| Corporation tax | Tax | Profit | Rate | |-----------------|-----|--------|------| | On policyholders’ share of profits | | | | | 2016 | | | 20.00% | | 2017 | | | 20.00% | | Tax on policyholders’ profit | nil | (A8) nil | | On shareholders’ profits | | | | | 2016 | 21,016.20 | 105,081 | 20.00% | | 2017 | 60,957.70 | 320,830 | 19.00% | | Tax on shareholders’ profits | 82,063.90 | (A8) 425,911 | | Tax before DTR | 82,063.90 | | DTR relief | (B) (1,112) | | Income Tax set off | (3,556.10) | | Corporation tax liability | 77,395.8 |

### B1 – Double tax relief – summary (LAM09000)

| Category | Relevant income | Foreign tax | Creditable tax before limitations | Excess foreign tax | Actual creditable tax | Tax deductible | |----------------|-----------------|-------------|-----------------------------------|--------------------|-----------------------|----------------| | BLAGAB (B2) | 81,420 | 1,112 | 1,112 | 0 | (A9) 1,112 | 0 | | Non-BLAGAB (B3)| 302,897 | 7,602 | 6,700 | 902 | (A9) 0 | 7,602 | | Total | 384,317 | 8,714 | 7,812 | 0 | 1,112 | (A5) 7,602 |

### B2 – Foreign Income – BLAGAB

| Source | Relevant income | Foreign tax | Rate % | Foreign tax to 20.25% | Excess foreign tax | Appropriate fraction of relevant expenses (TRE x RI/TI) | Income above expenses TIOPA 2010 s100 | Relevant fraction of profits | Income restricted to profits TIOPA 2010 s101 | Maximum creditable tax | Actual creditable tax | |-----------------|-----------------|-------------|--------|-----------------------|--------------------|--------------------------------------------------------|----------------------------------------|----------------------------|------------------------------------------|------------------------|----------------------| | Overseas shares | 19,230 | 260 | 1.38 | 260 | 0 | 17,250 | 1,980 | 15,631 | 1,980 | 400 | 260 | | Overseas debentures | 62,190 | 852 | 1.37 | 852 | 0 | 55,772 | 6,418 | 50,551 | 6,418 | 1,296 | 852 | | Total | 81,420 | | | | | | | | | | 1,112 |

### B3 - Foreign Income – non BLAGAB

| A | B | C | D | E | F | G | H | I | J | K | L | |---|---|---|---|---|---|---|---|---|---|---|---| | Source | Relevant income | Foreign tax | Rate | Foreign tax to 20.25% | Excess foreign tax | Appropriate fraction of relevant expenses (TRE x RI/TI) | Income above expenses TIOPA 2010 s100 | Relevant fraction of profits | Income restricted to profits TIOPA 2010 s101 | Maximum creditable tax | Actual creditable tax | | Overseas shares | 100 | 15 | 15% | 15 | 0 | 67.37 | 32.63 | (1) | 0 | 0 | 0 | | Overseas preference shares | 18,997 | 4,749 | 25% | 3,847 | 902 | 12,798 | 6,199 | (352) | 0 | 0 | 0 | | Overseas debentures | 283,800 | 2,838 | 1% | 2,838 | 0 | 191,196 | 92,604 | (5251) | 0 | 0 | 0 | | Total | 302,897 | | | | | | | | | | 0 |

### G – Capital gains and losses (LAM03200)

| Capital gains | Total | |---------------|-------| | BLAGAB chargeable gains | 89,556 | | TCGA/S212 | 221,621 (LAM03300) | | Total before losses offset | 311,117 | | BLAGAB losses (below) | (68,540) | | Net capital gains (A1) | **236,455** |

| Capital losses | |----------------| | BLAGAB losses arising | 22,875 | | TCGA/S212 losses arising | **45,665** | | | 68,540 |